Unpublishable thoughts. A blog about politics, economics and other trivia.

Wednesday, October 20, 2010

The Old Politics of the Welfare State

George Osborne's spending review has, as trailed in the days leading up to today's announcement, taken an axe to a swath of government activities. Cuts of £81bn over the parliament, out of a public spending bill of just over £700 bn, take a huge chunk out of the state, particularly if we consider that the biggest ticket item - health - was (apparently) spared any cuts at all. The strain is taken by the welfare bill - something in the region of £11bn altogether, including cuts on social housing, disability benefits, and help for children. Indeed, undermining help for children seems to be the leitmotiv of government policy, kicking off with the cuts of child benefit for high earners, through to the cuts to Sure Start, childcare credits for lone parents, and, of course, schools (whose capital budgets are decimated).

This is truly horrible. The gusto with which this administration has taken to rolling back the state is alarming - you get the clear impression that this is what they wanted to do all along. We'll see what the political response is, but it would be truly amazing if this passed without major social upheaval, even if the government's macroeconomic gamble pays off and growth resumes in spite of the squeeze. And if this pushes us back into recession, with an estimated million jobs lost and no-one hiring...

One headline today talked about the 'deepest cuts in government spending for 90 years'. Anyone remember what happened last time?